Spire (SR) 20 Nov 242024 Q4 Earnings call transcript

Good morning, everyone, and welcome to the Spire Inc. Q4 Fiscal Year 2024 Earnings Conference Call. [Operator Instructions] Please also note today's event is being recorded.

At this time, I'd like to turn the floor over to Megan McPhail, Managing Director, Investor Relations. Please go ahead.

to XXXX welcome Call. Quarter and morning, Spire's Fourth Fiscal Earnings Good new issued this our it under release earnings website and spireenergy.com We news access morning, an you may at [indiscernible]. on that accompanies is download from then website the either Events slide our There site from Investors our it or a webcast under and you webcast, and may presentation and Presentations.

statements cover Today's within and use may earnings measures. call, Before Private responses Reform statement contain meaning Securities we of Act the harbor forward-looking begin, of the of our safe let questions, including me to Litigation non-GAAP XXXX.

forward-looking based to are filings our quarterly cause statements future Although These different assumptions, with our may and outlined in the results or anticipated. are uncertainties be there uncertainties are and annual various performance that and than reasonable factors SEC. risk those on risks

In by used slide in of these non-GAAP are GAAP our management and presentation. be Explanations counterparts when measures and we comments, results discussing release and performance of our news reconciliations their operations. our measures will to both evaluating contained

earnings as I earnings going share non-GAAP referred previously will we earnings economic forward, referred net as note, net be to would measures to earnings adjusted per the and in like per to share. economic adjusted

President Executive is Doyle, and Treasurer. Vice and Rasche, Executive President CFO. On COO; Steve Vice and Lindsey, the Scott CEO; and call Adam President today room Also today President and Vice Woodard, is Steve in and the

I that, With turn over Lindsey. the will Steve call to Steve?

across Thank year-end outlook an on XXXX update morning, businesses. results, good for everyone. developments Inspire's other and you for Megan, us joining Thanks, and fiscal our

continue thank The I nothing service, I take Rasche, spring. and our serve I organization Officer, congratulations as dedication as adviser the step to you tremendous he from Steve his we after of the Spire's on today. his transformation of and I and until senior behalf leaves XX begin, extend I and leadership this instrumental Financial on opportunity behind we'll to in of X, want scale the Steve January has driven the legacy. to CFO retirement down gratitude Steve know to role will been across years the Chief Before our speak a Steve, wish best. when have and my see but and say and over years, coworkers all success you acknowledge company

new industry Adam pleased Woodard, President, our years, Steve know Vice will of and has last to of that a our you transition. ensuring worked [indiscernible] Utilities Treasurer in over and developing since Adam role Gas that understanding a Adam and the the markets several the has deep say XXXX. CFO a closely CFO. current I'm strategy succeed Steve of Many in seamless company, and played as fire financial have key

to lead Adam's role. confident We in ability are his us new

to gas X, to walk lower This now outlook. in per earnings X share, I'll higher year morning, utility an of Financial we $X.XX Slide adjusted improvement share Marketing performance, a Turning offset earnings key of midstream reflects $X.XX fiscal partially This increase per and through categories: regulatory where by and segment. compared our XXXX ago. segments reported Gas and to operational earnings

striving fundamentals moment. outlook can Steve assure a quarter financial will a in for I headwinds results we XXXX, to in deeper into expenses the results as by fourth a and dive Our consistent begin below and We result gas natural expectations deliver future. corporate. of the our created results at market you were are provide higher

our per annualized have which our year This paid we rate long-term to share. our Board growth increases, of bringing is confidence XXnd increase an approved Directors Recognizing dividend plan, of X%, the recently to of common continuously $X.XX consecutive in our dividend confidence the This safety and capital is The $XXX enhance gas-related XX. part past further we [indiscernible] million to customers. across reliability successfully year, this our and gas on of expenditure businesses the ability plan. utilities execute for to bottom our invested to

recovery with a perspective, our mechanisms in From stakeholders strengthen are jurisdictions. to regulatory we engaged key

consistent key Our outcomes constructive to rolled more a to billion. out leading more and to increase goal regulatory plan capital we sustainable financial pertains expenditure financial message and our to Today, XX-year to forward achieve an is $X.X outlook. our XXXX performance. A

EPS We X% of also fiscal of to per guidance and share. reaffirmed target earnings our XXXX launch growth to X% $X.XX long-term $X.XX

visibility this into infrastructure delivering to we will deliver value. comparing our Missouri have FY Looking remain continuous strategy drive in ahead, grow and focused lines. returns help businesses We to anticipate 'XX, earned targeted driven achieve growth improving our which in improvement we us on our our invest to

update our on our on to utilities. driver an growth focused remains investment at X our for infrastructure earnings plan. of gas modernizing Long-term capital Turning Slide investment

million $XXX During fiscal Utility and Gas to was and new connecting investment the million in segment. spent businesses. XXXX, XX% our invested with $XXX upgrade infrastructure capital totaled million, spent over homes was additional $XXX

We meters also deployment our residential 'XX. million FY $XXX accelerated in advanced customers to investing of

benefiting of we to year, the from total bringing meters, advanced During over installed XXX,XXX. technology customers this the XXX,XXX number

The month. year our additional totaled and capacity online come for the investment expansion, track in to remain we midstream largely withdrawal for storage the next $XXX segment million, on the over

again Missouri's forecast. $XXX gas million, is 'XX, This Spire incremental During utilities prior installations. $XXX we of plan on plan and new compared fiscal advanced year to of our meter representing an million service completion focused connections once capital reliability, to to spend invest

utility, is XX% XX-year CapEx X% growth Spire approximately billion utilities, gas plan $X.X Lastly, driving to our robust Missouri. our base with the X% rate at now at largest

and providing employees our safely deliver our and an a for for we communities year, service customers, X maintained serve. gas them Investments with utilities. year driving shareholders Slide reliable and on that affordability. focus to the customers, excellent our to benefits energy continued Throughout the the for on during update Turning are

operational efficiency July, to expect benefits initiative savings affordability see across improve continue you and our launch initiative efficiencies the the realizing to expectations. with growth this call and and to a organization. cost our in cost overall We're On our to we structure improved of support lower discussed of customer

X% run O&M FY we prior the expenses at as O&M segment run rate that During benefit to we FY our to initiatives. 'XX rate expect from and year benefited be fiscal were from better year utilities to continue XXXX, to flat 'XX cost Gas compared lower the compared Utility our management

natural continue focus However, reliability the our on maintain we will to of system. our safety and gas

was in For nearly leak example, XX% time minutes X was our response it XXXX. than faster average or in XXXX

regulatory expect upgrades delivering rate to associated incurred technology case end, to in natural costs are cover a we that safely to serve receive the gas our to our of recovery the front, and by across file mechanisms customers. end Missouri On of better costs investment with in and infrastructure essential constructive that we jurisdictions our To the ensure for timely month reliably.

with Our of and the top in process. revenue, paired return. week's will in anticipate purchase working throughout customer. recovery lower for improve that updating cost and priorities case impacts looking both gas to including an the We residential rate look at our the request overall to options to of result service adjustment, rate of approval remain our We're base of We volumetric forward stakeholders conservation. last with weather decrease the key the build average

which recently cases. $XX.X eligible or Public projects month for Service our brings this I'm allows $XX.X annual effective to Missouri an between million. our Commission rate [ was The rate rider certain revenues for revenues annualized earlier increase that and reflected to million us infrastructure in the pleased approved ISRS, increase to recover say this in of ] rider

Missouri's plan goal integrated met. this IRP in state in how resource Spire ensure filed XX customers' or we week, needs customers a first the commission. primary the our Missouri next our our to Further, and energy will over provides energy the being the support with The IRP blueprint are for years, communities with

Moving now update regulatory to Alabama for our operations. a

As budget. in state are are set a reminder, using forecasted our rates updated and annually the a

process working Public are in update closely the and the setting We RSE staff with rates. to are rate Commission Service currently

We execute To well to believe success growth the are businesses. we capital plan of for performance our our gas-related and experienced the investment in management utilities sum of robust employees into the us our lead support up, future. and our team on successfully and ability we as positioned

Steve I a over provide will to update. now hand the to financial call

and good everyone. Thanks, Steve, morning,

and Let's XXXX for 'XX results fiscal our review and guidance beyond. year our

$XX slightly ended our of just earnings businesses. Those market to our our company the per earnings last were conditions holding segment, expense. interest basis, we or than with million, reported the $XXX adjusted XXXX, ahead fell include combined below nearly earnings per than or For year $X.XX share, million weak $X.XX marketing loss quarter due $X.XX a fourth but higher into expectations better of XX, X% the of million coming were our seasonality impacting $X.XX reflecting share adjusted On of higher our September of under $XX These year quarter last results year. year. last

I'll fiscal my in the year. remarks remaining focus Now today full

Looking at our business segments.

$XX Salt interest $XXX our and or we are by weather from of pull-through with up XX% expansion. million, $XX $XX expense. storage Plains earnings were well Our million, year from Missouri gas mitigation up as million offset utilities as million in earnings new Missouri Midstream rates Alabama acquisitions delivered in our as higher customer partial and both and seeing MoGas as earned last associated

million earned by the were months. strong over winter basis last market $XX last X Gas as Marketing lower volatility conditions offset

benefit were lower finally, by improvement and due and these initial other reflecting expense. was results the well reminder, in over $XX marketing our rate million, this interest last or of a year recur last costs, favorable offset year this million As $X were but not to costs the an that interest in year, year. did significantly results year part 'XX below XX% delivered conditions hedge market corporate holdco fiscal corporate solid And slightly expectations, above nearly

of presentation. analysis is in your reference, our detailed to the and a year results appendix included this For quarter fiscal variance fourth

to Turning outlook. our

fiscal X% recovery and growth case, share 'XX mentioned the As of new adjusted midpoint retaining rigs year to are X% filed target to ISRS is to Steve first, the long-term our range per continued of effective 'XX. our in as per outcome growth of a via with with the $X.XX driven Missouri, timely rate original in be mechanism share we earlier, by, growth guidance coupled targeted reasonable X% a fiscal year in earnings This X%, soon-to-be base. base reaffirming rate

focus growth annual coupled equity IRS cost resets; on continued Southeast, efficiency. the and Second, in finally, with

earnings improvements 'XX, range fiscal work between year target range earned share. the 'XX into back per expected at a short range With 'XX target the bit fiscal growth for ROE, the fully but our the X% a at through launching actual as outcome adjusted our results $X.XX and moving falls in we beyond. are case. anticipate is from At our reasonable $X.XX midpoint and midpoint, we of growth our and Missouri year this a We in rate

gas RC our Alabama the Missouri will earn anticipate Gulf Turning weather, between new combined to of of million utilities benefits We our rate the business next return mechanism O&M and million $XXX and under in the revenues rates reflecting no $XXX year, in unit increase run and guidance. and normal incremental cost. ISRS

were As in debts, third-party and our year, Steve is noted maintenance expenses, year 'XX efficiency X% the lock with year among in of bad fiscal savings below increases excluding fiscal offset our 'XX last our cost and inflationary initiatives. costs, to in others, wages, operations insurance, earlier, those impacts goal other and

net expense interest lower. also expect to We be

in and see the anticipate to an of XX from depreciation. Midstream expense commenced combined $XX In of higher expect $XX 'XX. are million in Gas contracts adjusted Spire increase Storage earnings in to reflecting 'XX, year earnings storage targeted operation growth the to These Turning the of reflecting and interest business, million growth. we costs, part rest online and to expectations in due storage million, benefits the full million, fiscal year benefit organic Marketing. West bringing $XX will We with offset storage between be pipelines. we initial both our capacity year the fiscal $XX adjusted by

principally in see storage to not interest On be down the $XX cost of XX% $XX that recur million, and fiscal the range mix is anticipated last fiscal the the pipelines is $XX million year's rate from to pipeline and MoGas year be adjusting interest for Corporate rate we midstream year the from in year XX% side, hedge 'XX. roughly full acquisition. after the of to resulting expected to million business 'XX. negative run benefit will other, in roughly anticipate benefit We

sales 'XX, $XX that also we our as plan settle had appendix. will at in incremental outlined to very we'll equity fiscal going After forward forward much on year year program. is lower or our our fund busy targets. note debt of long-term assumes XX. credit maturities to Slide our We've level and manage our of million updated $XXX needs financing that with the to plan. roughly no X/XX, in capital A a needs, I fiscal X-year finally, a would equity ATM debt debt that refinancing And financing turning to 'XX. million And payout of table metric X-year our included maturity our change plan dropped

have off year And team. remain summary, funny. plan from our with to away are on I pretty the X focus those the In on we a.m. brands next smarter you and Steve, across words goals. heading focused appreciate easy, I that solid fiscal strong I a those great industry 'XX, and flights a that and knowing against we'll and Adam our and was years your spring. and suggestions. due My preparing always leadership decision meetings It's your into for to I'm of handing meetings actually delivering my I truly retirement kind can assure What that the goodbye walk will at miss investor acknowledgment questions Spire. here XX-plus say finally I by to

look few as and next fiscal months tracking the I shareholder, I you will rest year assured, all as be into and over roll progress forward. 'XX seeing to Spire's going success forward we

let you, to turn that, Steve. me back over With it

with to XX beyond. for the achieve are year year and Thanks, like on fiscal 'XX targets laser-focused finish for Steve. Slide priorities our as our to I'd coming we

our that shareholders. resilient, Our customers value building priorities more company year sustainable this and in and for are delivers for aligned a efficient

foremost, and committed and to are delivering gas natural reliably. safely we First

shareholders primarily During the capital with deploy on strengthening regulatory engaged gas and year, expect while achieve we are stakeholders to mechanisms. we the utilities. regulatory constructive at to for And recovery key outcomes customers

progress take and And we We maintaining our sheet. guidance and the EPS the balance lastly, for we're strength joining updating focused you to on our will questions. year. fiscal forward you of now delivering today, Thank throughout our range year look XXXX on us your

first And from Richard Instructions] have in Sunderland line, we [Operator JPMorgan.

you And Adam, of I questions, and retirement my Steve on and year. guess luck the both of best announcement before to in congratulations Steve,

where parse and to I'm you particularly growth the expecting Let's the well. indicated segment hoping drivers, And guess, there. see, year-over-year like in midstream, it I finer XXXX previously marketing detail exceed foremost, some those first looks can you're as

Any forward? guess is versus And is that up really guided those, the a previously. helpful. So ratcheted for details you both baseline be this of bit going what there baseline I just would little to

handled Rich. organic anchored at the Yes, the is Great again. We team previous thanks to question, that 'XX. Marketing marketing Brendan we'll years. to and to the positioned why back strategy in market guidance were able And of for consistent with and how that's business, be original for actually growth to but we've last take opportunities, hopefully go John, which be year, drive. we back advantage -- we the

of we've starting business talked grow. Midstream, and every in better the into, West also a just investment landing when of every kind business timing that think which into Spire April that's the expansion organic expect gave of were the in ago So you to see this the clarity to many you're rest returns we correct. benefits X year. We that final on because we some contracts, the the we guidance now that of the of previously. I normal months yes, is how have with of still X And process started directional would we and I business step the growing expect now of about Storage think investors

for to would the think run close that be that where we're business. that is rate expectation I So getting

and generally year. Storage online of were Spire in know, going to work as the you coming overall, industry some of December contracts Clearly, in rest then X/XX. West the through this capacity and of that expansion we're for the on renew

you're to and business that to continue to modeling. your to you're But where up also doing we'll lot where originally a didn't good you a a getting XXXX guided. clarity going we is So we forward. step just fix mix of pretty right, the And due help But that business clarify out the from for manage we mix. help it's as better see in us

on And other side filing to some had Missouri it. the commentary is Great. commentary were helpful. you that the you piece need an you you uplift there. the Got with then clear was reasonable there But X% sure that rate just it -- rate you authorized the into back X% outcome there just out in Could of rate case utilities drivers like as returns make outcome you to was Just for growth. That the sounded up X%. from saying ROE be it or shortly. against of understand the I realize case, to the the to yet some that picking around how X% Is well? want not a the gets case gets it you coming XXXX range

really, It's as for of we in there. -- And earning about we've we're straightforward service under behind do we're recovery No. talked are cost recovery, -- a looking Missouri. before, we

bringing not in closer that reach or to the returning with but also just Missouri. we're stakeholders in filing back outcome that return feel bringing our confident of case, get dialogue service that cost of and range. for we not our up we of encouraged expecting -- very just authorized, But return -- rate coming that can reasonable that Spire, case the by So our one, -- to into kind Spire capital into on we're a -- us we're anything return

Okay.

you're looks It final then for I attention impacts to of And some X, been there's in Understood. on for a return XXXX. one normal weather like just weather at me. years. know saying Okay. one Slide recent the

across want normal And 'XX, been start utilities. weather how X, year? just has trending confirm, to outlook just the your the weather to one, curious since date I assumes the fiscal of So

Yes.

the yes, is So is normalized that assumption weather.

functioning mechanism. is focused to for that -- filing to yes, the in weather more We have his something assuming do remarks, on something mechanism is normalized are that We and mentioned that recovery. in we've we're -- a weather. that fine-tune normalization as Steve But we -- straightforward

-- thus a year, No mechanism started on fall warmer-than-normal worked mechanism, the has how So has basis. this the on it far far. did comment the

Our Dumoulin Smith from next Jefferies. Julien question from comes

James It's for Ward on Julien.

in role, Steve endeavors. with the forward Adam, wanted your wishing future here. to look join and and deserved well on also new you to to Just continuing on first say in your best all congratulations, retirement you And work

mechanism So weather on and well. front, the segment asked elements earlier in interested the the some debt question then was as there we of were

appreciate color there. So the

the understanding As cuts, we potential I are of you to heading relative limitations say, What interest guys leadership. I outcome, assuming there guess, given beyond in guidance said, the level. high recent in in as rates terms well impacts that to should assumptions both XXXX or of XXXX, an next year and and your got now as at look election levels at relative current I levels, refinancing, we've into on then terms [indiscernible]

this And Adam. Jamieson, absolutely. is No,

cuts you've plans been and uncertainty to On short-term observed, would of year. observed obviously, guess the our didn't couple happen mine cut. next would But assume that. I the we of the to good I as we something see cuts before expect -- short-term be more in X around would expected. as started think That side windows side, the is occur, I some we there's far that as But is end X think Fed more has to your as on a

lot seeing But XX to are comfortable of level longer-term current don't long-term right now. months. the that a do rates side, we're we pretty the On next we the with in have

you just the helpful. color got -- in And obviously, Terrific. terms refinancings. That's any incremental additional million $XXX extremely mentioned of

any color debt. FFO Just around to

threshold have on S&P's You question lot would obviously final relative there. a and question that be of to like so a

Great see there. absolutely. No, do continue to question. progress We

basis, above in sustainable with the sustainable Moody's I of target coming rate in we'll getting that I think way. We're a target see now, on case. fully think really that certainly but up a out that

Yes.

have the with at looking a like it of seems And we're projections. you're what That's going lot question. to Okay.

question Christopher Securities. from And from Jeffrey our comes next Mizuho

Maybe utility-focused the a that Congrats legislative seem on to could Steve. to for Missouri. upcoming outlook and Adam There few for bills Spire. touching be impacts just the have in some session

about Just or case more kind of therein? filing those and you asks any would timing impact speak of those the broadly of rate whether the can your

rate It test answer we is Scott case. impact Christopher, gas through utilities. Yes. do first. we for future session working this Doyle, clarifying legislative this is year proceed how last the or won't of the your availability I'll kind timing question are What with

recall, made its Ass legislation way last year. the you through earlier may session in this

that worked that And session. we we legislation progress made was so the advance through that topic this in as in to on work move legislative

the Great. Okay. updated just guide. And CapEx maybe then at looking

Just kind 'XX curious, CapEx seems looking decisions? on for rate more of run 'XX, and and of kind about how putting kind it the for you're maybe drivers just 'XX in of those we're like the beyond and

it's Missouri. that near out CapEx lot replacements Adam. a getting by about term. particular, A in in driven maybe We're done there -- talked by focused and is of Chris, little on looking is think before we have our rate. meter bit Yes. of a I of lot obviously, the And run driven, our

X% so, Missouri. specifically, X% in bit just getting done of And kind into up that rate normalized see growth, growth little months done. back the that in last moved getting kind or a XX CapEx 'XX that probably has more we the of that than higher a meters base So getting over to and

don't far into that out out want time. You to spread over too out

Chris, is down as say last thing I capital The winding of we're deployment the into storage the this expansion. would Steve. And is,

real-time from rate line as we a Missouri good well XX a And it well We're next earlier I as to a And XX-year for outlook beyond goes pretty long much now, mechanisms capital think regulatory we've years. giving you really, right that. we in sight is making. deployment but XX% have got talked Alabama, utilities dedicated the perspective. roughly is in of which about

capital in very our the we utilities. plan feel So about good

comes Bill from Instructions] UBS. next Appicelli question from [Operator Our

] to the go else Congrats there. everyone [ Adam, sentiments and Steve

Just wanted QX the, guess, dig to bit. into a the results I

full guys quarter, bit in last a You expectations year. full guided year lowered little you earnings have of came light for the the down and then

So -- in modified to full the that there? the Was $XX $XX I to that and you year $XX guess what Was came at million. gas for you outlook happened had million marketing? million

So was a expectations fell short you that please? share -- that, more what QX? in of Or color on little can

Yes, Bill, and wishes. thanks Steve. well your is This for

You are spot on.

think in businesses, you If that surprise us it QX the and X the marketing, the on areas market. was about negative of side the primarily were reflective really

seen and doesn't to prepared more on it as a been kind -- in give us get and to prices, low create the it through even of mentioned October surprised remarks have differential, We mean lot value. negative side. market And that opportunity The Adam base I current to has low a use alluded commodity the of is term. we that us the

the they fourth overall, if about their year marketing demand goal expectations and We -- I didn't it back, for materialize. that the some the step overachieved into the normalized actually we started think had with. coming assumption just And you achieved more year of quarter, of for rate we year if our

but we one. very we own where And with ended surprised it we're on the clearly us pleased So up, downside. still that

of dollars had in interest couple other of The higher terms costs expected. a probably we segment than million was

bit. we little actually got and us -- interest business business that expense are performed of majority very And I our our think well a the think a And but the going other about think us surprisingly, surrounding segments up as going well surprised sets that I 'XX forward. that big quarter, this we've forward, also

up I'll Bill, comments. Steve's this Steve. is on follow

for is go And unbelievable and the job to there the last and our that to over creating have be of But they've an results word years, to years and not allowed market. to opportunity in the might not root equity. there invest got much. go You for utilities have us sometimes to market marketing back there's done as X some

term. in long about we So I think the think this

utility quarters, very a have with we're some you and way from that think and so we you in might and downs. pipelines comfortable some I midstream some think and And storage combination mix a ups from have. perspective, we're a about if years that's of structured But business the marketing, the perspective,

then [indiscernible] you a conversations, the show maybe up Okay. better and prior or profile in going follow-up 'XX. and in actually cost But did QX achieve that savings O&M were think overall and Great. run guess with saying on of question was in I And 'XX. there line now rate I O&M some just 'XX, expectation 'XX QX, to you're

So and they've of the is of of sort Or cadence cost the opportunity? there more cost up maybe saving just address reductions how sort to showed relative your expectations?

internal that and even or this how of our we color within longer-term a kind construction in we're you're operations, there the delivering to the kind about and initial centers, labor as are support And Bill, it it I'll what's full O&M, savings well. savings some from activities our is talking savings across of quick hand corporate then Scott. of and and and strategy coming that, as Yes, our and the our just on back call even service optimizing some our But driving well mix real leadership service Yes. -- functions give maybe our whether our on in structure. off Adam of optimize even reductions on utility labor labor external strategy guide our as both as well.

that deploying to as the we're we're fully spend that meters gains recently the in we've fully deployed technology getting we're beginning here of some and of with And the made form system associated then that efficiency see active.

mid Louis year. As in the market Adam area mentioned earlier, we'll next system have fully St. deployed that

And And want coming guide? Adam, that with deployment. have may associated so of to us the we comment opportunities just front on in you

we're of this from some year the extra Yes, is a very below at time, all given seeing the but last we it's something flat progress and be that. that on cost that's step managed about. guide feel year. Bill, have to inflation, good O&M But typically, into an perspective, very we're below And that this headwinds over to Clearly, kind utility. we made extending able we flat the guide, pleased

ladies and Megan gentlemen, turn over back this to additional questions, And no I'd to closing time, at remarks. for floor any showing McPhail like and the

the Have Thank the you and with coming We you morning. for joining call this all today many a day. look to of later forward speaking weeks. great in

And we'll do you conclude gentlemen, today's joining. thank and with conference We that, for presentation. and call ladies